Risks of Investing in Commercial Properties in Perth

A recurring tip for financial stability and success is diversifying your portfolio. While you may be familiar with residential properties, commercial real estate can offer just as much – if not more – reward and benefit as homes, apartments and townhouses.

For many, commercial real estate investments may seem like a foreign concept. But, the risks often mirror those of domestic properties and the rewards can be plentiful.

So, how do you know if commercial real estate is worth your while? Find out more about investing in commercial properties with tips from the professionals at ACTON in Perth.

Economic Conditions

As with any investment, economic conditions have a great impact on both demand and property value. During economic downturns, demand for commercial properties tends to fall due to slow economic growth and weaker confidence in businesses.

Before you commit to any investment, take time to research and understand the current and projected economic conditions that could impact your commercial property.

Lease Terms and Vacancies

Commercial properties vary greatly in size and application. In turn, lease terms and vacancies may be different. Larger commercial properties may be more difficult to lease in comparison to smaller properties and are generally more expensive to hold. Once premises are vacated, it can sometimes take longer to find a tenant.

The flipside to this is that commercial tenancies can often be significantly lengthier than that of residential properties, allowing you to secure a return with greater confidence.

Supply Changes

Just like residential investments, supply changes can impact the decisions of your tenants. An increase in property supply within the area may threaten your investment as tenants look to upgrade or expand into a different site. Similarly, you may be able to reap the rewards of higher prices due to an increase in demand in your area.

Evaluate the supply and demand trends of your desired investment area before you make a decision. Speak with professionals with an in-depth understanding of the local market in order to make an informed choice on your commercial real estate investment.

Current Trends

Key to making a smart real estate investment decision is examining current trends. Right now, Perth is considered to be a lucrative and rewarding place for commercial investments. As both inner city and fringe areas become more vibrant and commercialised, businesses are seeing an increase in customer engagement and demand.

For potential commercial real estate investors, this means that commercial properties have the possibility to attract long-term tenants looking to invest capital into growing Perth areas. A good commercial tenant translates to a stable and secure income into the future.

Finding the Right Commercial Properties

Interested in investing in commercial real estate, but not sure where to look? At ACTON, our experienced real estate agents guide you through a full range of diverse commercial properties throughout Perth. With your budget, preferences and circumstances in mind, we’re able to recommend ideal investment opportunities to strengthen your portfolio.